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Washington Highlights

Ways and Means Committee Holds Hearing to Explore SGR Payment Reforms

May 13, 2011—The House Ways and Means Subcommittee on Health held a May 12 hearing to explore new models for delivering and paying for physician services under Medicare. The bipartisan hearing was the first in a series focused on reforming the sustainable growth rate (SGR) formula. The committee’s focus will be on models that have the potential to improve quality and constrain the rate of cost growth. The House Energy and Commerce Committee also is exploring Medicare physician payment reform, and began hearings on May 5 [see Washington Highlights, May 6].

In opening statements, Subcommittee Chair Wally Herger (R-Calif.) said that he believes “the future of Medicare depends on a transition away from the fragmented fee-for-service system to a system where the incentives are aligned with better patient care not just more patient care.” Similarly, Ranking Member Pete Stark (D-Calif.) stated, “the existing fee-for-service system merely incentivizes the provision of additional care.”

Witnesses represented groups currently participating in various health care delivery reform models. Dana Safran, Sc.D., senior vice president for performance measurement and improvement, Blue Cross Blue Shield of Massachusetts, described a payment model in Massachusetts that uses a budget-based methodology and a fixed population-based budget, with incentive payments for achieving specific quality measures. Stuart Guterman, executive director, Commission on a High Performance Health System, The Commonwealth Fund referenced several payment models that would veer away from traditional fee-for-service. He specifically mentioned primary care medical home fees, bundled acute case rates, and global fees, all in conjunction with organizational reforms like multispecialty physician group practices or primary care practice networks.

In a May 12 comment letter submitted to the committee, the AAMC suggests that as the committee explores ways to preserve access for Medicare beneficiaries, it must also ensure that our nation’s medical schools and teaching hospitals are able to train enough physicians to meet an increasing demand. Rep. Bill Pascrell (D-N.J.) affirmed the need by stating that we can’t ignore the physician shortage that we are facing and questioned the witness panel on how new payment models would affect the current physician and workforce shortages.